Well, it appears that silly season has begun. If you listen to what some of the candidates in the October federal election are saying, you might reasonably conclude they are joking.
One party’s local candidate at a recent all- candidates meeting said his party would abolish all taxes for retired people, would provide assistance on rental accommodation or reduced taxes on owned residences and provide free public transport for retirees.
Well, I would qualify — which would be nice — but if such a policy were adopted, I bet the number of retirees would zoom upwards. Government deficits would also balloon unless, of course, those still working paid much higher taxes.
Another party spokesperson said their party would abolish the capital gains tax. Now if he meant capital gains would be treated just like other forms of income (a reform advocated in the Carter Royal Commission in the 1960s but never acted upon), I’m all for it. It is not obvious to me, however, that if capital gains were not subject to tax, this would benefit the nation as a whole. It would, of course, be a windfall to upper income earners who would, I’m confident, reduce their wage income to almost zero and accept compensation in the form of capital gains.
Certainly, such a policy would exacerbate income inequality.
Then there is the party that promises to repeal the carbon price. Let us be perfectly clear about the necessity of reducing carbon emissions, doing it aggressively and immediately. Otherwise, our children and grandchildren will be fortunate indeed if by the end of this century the planet is habitable.
In fact the price on carbon should be close to $200 a ton starting now and rising to well over $500 within five years. Those who advocate for the right to pollute without paying are naive, stupid or unwilling to face reality.
Another party has promised that, if it forms the next government, a national PharmaCare system will be in place by the end of this year. That is pie in the sky. Ten provinces and three territories administer the Canadian health care system. Negotiating the details of such a system with them, obtaining their agreement and establishing the purchasing organization will take time.
I would suggest the end of 2020 would be pushing it. Moreover, the U.S. and the E.U. are the homes of most international pharmaceutical companies; they are fiercely defended by their home states and rely upon patent treaties that work to their benefit. We need to examine carefully what we can and cannot do legally with respect to these issues.
Finally, one party has promised massive tax cuts that amount to more than $7 billion in lost revenue according to the Parliamentary Budget Office. The party leader said that efficiencies in government operations, economic growth and reducing expansion of the public service would cover the loss in income.
That, I suspect, is wishful thinking. Normally tax cuts, wildly popular with
taxpayers though they are, mean that government services will be cut or frozen. Put another way, there is no free lunch and it is time that politicians of all stripes admit to voters that they all have to deal in trade-offs.
With several weeks yet to go until the election, we can expect another blizzard of promises to be made. What each of us needs to ask about each promise is: What is the end objective of the promise?
Is it political grandstanding or solid policy aimed at dealing with a significant issue? Then, how much will it cost? Can we afford it? Was the cost estimate made by an impartial source such as the Parliamentary Budget Office? In short, can we believe it?
Then, before you head to the ballot box, ask yourself if the major issues have been adequately addressed by the political parties soliciting your vote. In your opinion, which party has identified the key issues and provided realistic solutions for you, your family and the nation’s future.
David Bond is a retired bank economist who resides in Kelowna.